‘HS3’ – Osborne sells the benefits of a global northern powerhouse


June 24, 2014 by Paul Goldsmith


One of the problems of being, you know, a properly functioning democracy is that governments need to try and build a case to the public before they spend many billions of pounds of taxpayers’ money. China’s infrastructure spending constantly astonishes – but they have an authoritarian capitalist political system so if they want to build an airport or railway through someone’s house, garden or even a city, it happens. We have a different system – hence in order to build the High Speed Rail 2 (HS2) system the last two governments have had to spend a great deal of time selling its benefits (and trying to assuage fears about its costs). So it was with George Osborne’s speech and interviews on the news channels yesterday.

Osborne’s main point was that once HS2 was finished there would be a very quick need to build HS3 – a link east to west (Liverpool to Hull) that linked the cities of the north, helping to create what Osborne called a “northern global powerhouse” to compete with London as well as the rest of the world. It would cost £7bn, possibly cheaper if existing lines are updated. Osborne justified it by pointing out that the cities of the North of England were strong but “collectively not strong enough”. With better transport infrastructure and careful planning they could be “greater than the sum of their parts”. Significantly, Osborne accepted that it is not “healthy for our economy, not good for our country if the powerhouse of London dominates more and more.”

The route would involve new tunnels and infrastructure, as well as improvements to the M62 motorway (which links Liverpool and Hull). It would cut the journey from Leeds to Manchester down from 50 minutes to 30 minutes. The idea – according to Osborne, is to make moving around the cities in the north of the country “like travelling around a single global city”. He has added to the ideas on transport further ideas such as having elected mayors, who “go into battle” for their cities like Boris and Ken have done for London, and major investments in science and universities.

Political sceptics might point out that with declining global support in the North of England, this might be an attempt to show that the Conservatives are keen to increase prosperity beyond its traditional strongholds in the south. Labour’s Shadow Chancellor, Ed Balls, pointed out that regional growth divides had “widened markedly since 2010” when the coalition government was formed. Balls also pointed out that his party had been saying for a while that high-speed rail needed to show value for money by maximising the benefits for the whole country – including strengthening the links between northern cities.

Regardless of the politics of this, the truth is that we have an out-of-date rail system and a choice has to be made very soon what to do about it. Some would argue that infrastructure spending would be better targeted towards making sure broadband access is as strong as possible for everybody in the UK, given the realities of how people work. The trouble for the government is that a sensible, honest cost-benefit analysis of HS2 struggles to properly define the benefits. The communications experts and lobbyists working on behalf of those who want HS2 to happen have changed their explanation of the benefits from the environment (as people may use cars less) to saved time (although many people get more work done on a train than anywhere else so aren’t too bothered) to bridging the North South divide (if so – why not start HS2 by linking Manchester to Birmingham then go to London)? For a good, reasonably unbiased look at the arguments for and against read this.

Other complications with HS2 includes the fact that the costs (in terms of noise and air pollution and inconvenience) fall on one group of people – those on the route, whilst the benefits (jobs, etc) fall on another group (those living in or near the connected cities). There are many who would probably want HS2 to happen if it wasn’t affecting their own backyard, and they happen to be quite well-off and Conservative voters. There are many who stand to gain financially from HS2 who are spending a good deal manipulating public opinion in favour of the project.

The whole process is extremely slow because we are a pluralist democracy and competing groups do get to speak up without fear. Costs and benefits are exaggerated by people with a personal interest in them, and in the end the government has to act as a neutral arbiter – deciding what is in the best interests of the population as a whole.

In the end, the government has a mandate to build HS2 – phase 1 got through Parliament at the end of April with a majority of over 400, so this isn’t actually a political issue, as high speed rail appears to have cross party support in Parliament. Yet George Osborne has just had to do what I suppose government leaders will need to do for the next 20 or 30 years, addressing the court of public opinion repeatedly to persuade them that a project is in their interests. That is democracy. It’s not pretty, and it’s slow, but it’s democracy.

2 thoughts on “‘HS3’ – Osborne sells the benefits of a global northern powerhouse

  1. Rupert Bickham says:

    From my perspective we should be looking to upgrade the rail system as a whole and we should not be starting by doing this nor HS2 in the short or even medium term. From a personal perspective, someone who has an interest in the way our rail network functions, I believe that the major priority is to look down to the South Devon Coast, specifically the ‘Dawlish problem’, the Dawlish problem shows the lack of funding the British rail network in the south west has had. So currently the ‘new age rail plan’ is irrelevant if you can not get from London/Bristol/Birmingham to anywhere west of Exeter every winter. So in other words the current prerogative should be ensuring that we have a rail network that can cope in adverse weather and then look to cutting journey times elsewhere. Further, this shows what a gap we now have in our rail network after Dr Beeching closed many of the branch and secondary mainlines that were deemed ‘non-profitable’ in the 1960s. Those lines would more often than not be invaluable in terms of relieving congestion on the road network, for example, around the inner Birmingham or Bristol areas.
    Thus, I feel we need to reinvest in our rail network for the longer term to modernise where we can, the trains on the Great Western mainline will have been in service for over 50 years, 1975 to the late 2020s.
    But nor do I believe Labours plans to ‘re-nationalise’ the rail network will work in a positive way. If looking at the previous nationalisation in Britain from 1948-1997 you have to hope that Labour have there eye on the British rail era of the 1950s or the sectorisation of the 1990s.If not then we will be suffering at the hands of the ghost of BR in the early 1970s, an era held back by a chronic lack of funding, lack of reliability and lack of public support.
    But, I am not arguing against evening out the ‘North-South divide’ but I feel we should be concentrating our transport funding elsewhere.


    • The problem of course is that governments like doing “grand projects” that allows them to show they are ‘doing something’. Investing in improving the existing network doesn’t show what they might call tangible benefits does it? As for re-nationalisation there are economic reasons for it that make sense given that each line is a natural monopoly and the eastern railway line has done so well under state control


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